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HomeTop NewsECA was depleted for security purposes, says finance minister Ahmed

ECA was depleted for security purposes, says finance minister Ahmed

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The Minister of Finance and budget, Zainab Ahmed has provided reason for the depletion of the country’s Excess Crude Account (ECA) to its lowest level ever, saying the withdrawal from the account was done in the interest of the nation’s security.

Ahmed, who spoke after Wednesday’s Federal Executive Council (FEC) meeting, noted that the withdrawal was done in consultations with the National Economic Council (NEC).

In a communiqué issued at the end of the Federation Account Allocation Committee (FAAC) meeting for July, the federal government said the balance in the ECA dropped from $35.37 million to $376,655 in June, without providing further details.

She said the governors, who are joint owners of the accounts, were aware of the withdrawals.

The minister explained that the account has had no accruals in the last four years because of the volatility of the commodity in the international market, adding that withdrawals have always been in consultations with NEC.

“The last approval that was given by the council was the withdrawal of $1 billion to enhance security,” she said.

“We have been utilising that — the last tranche of that has been finally released because deployment to security agencies is based on the contracts executed and it’s been used strictly for that security purpose.

READ ALSO: Terrorists abduct 12 people from Niger State villages

“So, the utilisation of the account is with the full knowledge of the governors.”

ECA was established by the government of President Olusegun Obasanjo in 2004 to set aside excess fund above the benchmark price set for crude oil exports.

It was meant to help stabilise the country’s economy and smooth out the impact of price volatility in oil exports. Since its creation, the ECA has been the subject of controversies and allegations of corruption.

However, TheCable quoted a source at the FAAC meeting, who said that the fund was used to procure two offshore patrol vessels (OPVs) for the Nigerian navy.

The two vessels would be used to combat oil theft, piracy, and smuggling, as well as conduct search and rescue operations.

The source added that the details were reported as a side note during the meeting on Tuesday.

“It’s terrible behaviour though. They didn’t tell the owners of the account, just spent and reported it,” the source said.

ECA is the difference between the market price of crude oil and the budgeted price of crude oil in Nigeria’s budget.

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